***DR FT***Jnae 11, 1991***
Table of Contents

:.0 INTRODUCTION .

2.0 ENVIRONMENTAL PROTECTION AGENCY J RIS :CTICN

3.0 TYPES OF PERMIT CHANGES

0 CLASSIFICATION AND REVIEW OF CHANGES 4-1 4.1 STAGE OF SOURCE DEVELOPMENT 4-1 4.1.1 Pre-operational Sources 4-2 4.1.2 PSD Sources Already in Op eratics . . 4-3 4.2 LEVELS OF REVIEW 4-4 4.2.1 Amendment 4-4 4.2.2 Revision 4-5 4.2.3 Ma-ior Modification 4-10 4.2.4 New Permit . .

. 4-11

5.0 CIRCUMVENTION

. . 5-1

6.0 INCREMENT ALLOCATION AND PRESERVATION . 6-1

7.0 EXTENSION OF COMMENCEMENT OF CONSTRUCTION DEADLINE 7-1 7.1 BACT REVIEW 7-3 7.2 ADDITIONAL PSD REVIEW REQUIREMENTS 7-4 7.3 DURATION OF EXTENSION 7-5 7.4 PUBLIC COMMENT 7-5 7.5 PHASED MULTI-UNIT PROJECTS 7-5

8.0 AMBIENT IMPACT CHANGES 8-1
9,0 BEST AVAILABLE CONTROL TECHNOLOGY CHANGES 9-1

APPENDIX A . A-1

APPENDIX B .

. B-1

APPENDIX C C-1***DRAFT***Juno 11, 1991***

1.0 INTRODUCTION

When the Environmental Protection Agency (EPA) revised its prevention of significant deterioration (PSD) regulations in August 1980, the EPA deferred the development of guidance governing its PSD "permit modification" process (i.e., the procedures by which proposed changes to a source, application or permit would be handled). Since then, the Regions and States have handled requests for such changes on a case-by-case basis. These involve a broad variety of re-determinations of exemptions from permit requirements and permit changes arising from sources which are already operating as well as those on which construction has not yet commenced. In the absence of guidelines promoting a uniform approach to handling change requests, a variety of decisions were made across the country, creating confusion and inefficiency in the permitting process for industry, States, and the EPA. Also, the Clean Air Act Amendments (CAAA) of 1990 do not specifically address the process necessary to modify PSD permits already issued and provides the EPA with the flexibility and discretion to deal with this issue. Thus guidance is necessary to assist all parties in dealing with PSD source changes and the need for consistency in PSD permit revisions. Such guidance should serve to establish a guideline to assist in resolving questions of legal risk when a judgment is made that a new permit is not required. Guidance is needed to maintain the basic inte grity of the PSD permitting process required by the CAAA of 199C when requests are received to revise, add to, or delete conditions in issued permits or information contained in a complete application. A rigorous preconstruction review for PSD would ultimately not be

1-1t

***D ***JUaa 11, 1941***

effective if sources could readily obtain subsequent relaxations to their permit conditions under a lax policy for permit revisions. For example, the CAAA of 1990 clearly intends state-of-the-art ap p lication of best available control technology (BACT) by PSD sources, but a lax policy for subsequent prop osed changes could undercut the environmental protection offered by the original BACT determinations. Thus, the purpose of this document is to provide guidance on PSD permit changes to permit applicants and permitting agencies. Guidance presented in this document provides a new and less cumbersome route for sources subject to PSD by which chan ges can be accommodated while ensuring the equivalent environmental protection required under the CAAA of 1990. , In doing so, it extends the Alabama Power Company v. Costle concept of de minimis to include changes with such small ambient impacts that such changes could be excluded from the full rigors of permit review. It also provides guidance for: (1) re-examining EPA-granted permit exemptions; (2) revising any EPA-issued PSD permit or PSD application, including those administered by States which have since obtained jurisdiction for PSD; and (3) the development of State and local agency permit revision regulations or policies. The EPA encourages States with approved PSD programs in their state implementation plan (SIP) to adopt this guidance concernin g source changes and the processin g of State-issued PSD permits which need revision or extension. For the purpose of determining the type of procedures that will be used when a proposed change requires permit revisions, a distinction is made between sources which have commenced operation and those which have not. A permit revision for a source already operating generally can be treated like any other emissions increase or decrease at a major source.using established procedures. It should be noted that in no case can a source operate at emission levels higher than those in its

1-2***DRAPT***JUno 11, 1991***

approved permit. For a source not yet operating, EPA proposes to group the range of possible changes to 

### a PSD permit into three categories, based on their potential significance to the p rogram: (1) those which can be expedited without detailed review (administrative changes), (2) those which can 

### be processed as permit revisions after appropriate analysis (minor and significant changes) and, (3) those which should be treated through issuance of a new PSD permit (fundamental changes). The required analysis for permit revisions typically would involve reconsideration of the basic decisions involved in the issuance of the original permit for the units that would be affected by the proposed change. This guidance also addresses the criteria for extending the 18-month commencement of construction deadline applicable to all PSD permits, and handling requests for changes toBACT following PSD permit issuance for sources already operating.

1-3***DRAFT***Juna 11, 1991***

2.0 ENVIRONMENTAL PROTECTION AGENCY JURISDICTION

All PSD applicability decisions and all PSD permits originally issued by EPA are covered by this guidance. This includes those PSD applicability decisions and permits which are still under EPA jurisdiction, as well as the applicability decisions and permits issued by EPA which subsequently come under State jurisdiction as a part of PSD program delegation or SIP approval. The EPA also intends for this guidance 

## to be used as a model for States developing their own permit revision processes for PSD,• nonattainment area (Part D of the CAAA of 1990) and other new source review purposes. The EPA believes that regulations governing proposed changes to sources, permits or applications are, needed as a legal alternative to having to issue a new permit for all except certain administrative changes. As 

### a minimum, EPA believes that state-of-the-art BACT should be guaranteed by any State reevaluation of PSD applications and permits.•••DRAF2•••Juam 11,:1991•••

3 .0 TYPES OF PERMIT CHANGES

It is currently accepted p ractice to re quire a new p ermit if a proposed change constitutes: (1) a major modification; (2) a difference in construction or desi gn from what was Lriginally planned, when an increase in emissions or ambient impact would result; (3) a fundamental alteration of an emissions unit or source; or (4) a difference in applicability, such as_a source no
longer being exemp t from PSD review. This guidance offers a new and less cumbersome route by which changes can be accommodated while ensuring equivalent environmental protection. In doing so, it extends the Alabama Power concept of de min_mis to include changes which are 

## so small in terms of impacts that such chan ges could be excluded from the full rigors of permit processing. Due to the similarity between major and minor "source modification" and "permit modification," it is important to establish a terminolo gy which will not be confused with existing PSD terms and which can be used consistently and precisely to describe the situations and actions regarding this proposal. Therefore, the term "permit modification" will not be used. The terms used instead are explained below. A "change" refers to the proposed or actual alteration of an application, p ermit, or source, or some combination of the three. An application for a proposed change initiates agency action if the application is complete. When the proposed change has actually been made, the altered source, permit, or application is
referred to 

## as "changed." or "revised." Changes are classified according to the effect they would have on the reviewing agency's assessment of the source. In order of increasing importance or

3-1***DRAFT***June 11, 1991***

magnitude, changes are considered: administrative, minor, significant and fundamental. An administrative chan g e involves no increase in either emissions or ambient impacts and no fundamental change in either the source or one of the emission units at that source. Application or permit revisions may be necessary, but additional review or analysis would not normally be required. Examples are typographical and company name changes (provided that a careful evaluation is made to ensure that no circumvention or fraud is intended by these changes). Minor changes require revisions to permit applications or issued permits and a certain amount of additional review and analysis, but do not constitute either a fundamental or significant change. Emissions or ambient impacts increase as a 'result of minor changes, but not above the significance levels defined in 40 CFR 51.166(b) and 40 CFR 51.160(b) (2) respectively. [check prior to printing to insure that the definitions are still , in the cited portion of the CFR] Significant changes are those where emission increases resulting from the change for one or more pollutant exceed the applicable significance level(s) but which do not constitute a fundamental change. If the affected source is operational, this constitutes a major modification and the source. must obtain a PSD permit for the change. Significant changes at pre-operating sources are considered application or permit revisions and 

### do not necessarily require the source to restart full PSD review. A fundamental change 

### is so essential (change of size, type, or location of source 

## or emissions unit), regardless of the net emissions or impact differences, that the changed source or emissions unit is considered a new source or emissions unit, and thus triggers a totally new permit review. A fundamental change could even result in an emissions decrease but still require a new permit. Examples include proposing a 500 tpy (tons-per-year)

3-2***DRAF'T***Juna 11, 1991***

emissions unit in place of a 100 tpy emissions unit, a kiln instead of a dryer, and proposing a different location for the source than the one on the original applicaticf or permit. The effect of a change depends 

## in part on the status of a project. Project status milestones are:

a. exempted from PSD review,
b. preconstruction PSD permit application submitted,

c. preconstruction PSD permit issued, but source is not operational (also, the applicability of new PSD rules is affected by whether construction of the source has commenced), and
d. preconstruction PSD permit issued and source in operation. The results of various combinations of changes and source status are summarized in Table 1 (Appendix B). A flow chart for determining which result is applicable to a specific source is provided in Figure 1 (Appendix B). Note that both Table 1 and Figure 1 can bnly summarize this policy. More detailed information appears in the text and 

## in a step-by-step decisionmaking guide provided in Appendix B.***DAAt3***Jun• 11, 1991***

4.0 CLASSIFICATION AND REVIEW OF CHANGES

There are two primary factors to consider in determining the scope of review to be imposed upon a source in response to a proposed change. The first of these involves the magnitude of the proposed change. The greater the magnitude of the change, the more involved the review will be. Four levels of change have been described in Chapter 3 (administrative, minor, significant, and fundamental), leading to the same number of (but not always corresponding) levels of review stringency: amendment, revision, major modification and new permit. A second factor, stage of source development (whether the source has been issued a permit, whether the source is operating and, in certain cases, whether construction has commenced), is critical in determining what action is required and whether any of the original increment allocation (for particulate matter, sulfur dioxide 

## or nitrogen oxides) is preserved. For reasons explained below, various changes made by a source that is 

## not yet operating can reasonably be treated in a more stringent manner than if the same changes were made at a source already in operation.
4.1 STAGE OF SOURCE DEVELOPMENT This

. guidance classifies some PSD-related source changes differently depending on whether the change is for a source that has already begun the operation authorized in its PSD p ermit. This difference in treatment between sources not yet o p erating and those already doing so is based on several factors: (1) a project in its earlier phases is much more flexible than one already operating, (2) the company's commitment to the p roject prior to operation is less clear and its position regarding further changes at a plant which is not 

## yet in operation differs

4-1***DRAFT***J1ina 11, 1991***

from that of most existing sources, and (3) the test of whether a source can operate and produce a product under the original construction plans eliminates a great many possibilities of obvious circumvention of the regulations. Treating an operating. source as essentially having completed the permitting process eliminates the burden of uncertainty on the company of constantly having to evaluate proposed projects in light of changes made

years ago. This guidance acknowledges these factors by typically imposing a different process for proposed changes at operating
PSD sources. It should be noted that commencement of construction already confers an exempt ("grandfather") status to a source in CFR Parts 51, 52, and 60. 4.1.1 Pre-operational Sources An application for a change to either an application or permit for a source not yet 

### is operation would generally prompt reanalysis of,the proposed project as if the original application had been submitted in that form. However, some changes would be considered sufficiently unimportant that they could be treated as application or permit amendments; these are termed administrative changes. Other changes would be important enough to prompt the need for a revised or new application or permit, and could require additional review actions. These various levels of change are discussed in detail in the next section. Application and hermit changes requested prior to operation are to be handled as part of the initially permitted project, rather than-as new projects. The EPA is concerned that individually small changes would be accumulated such that a cumulative significant change would not be given the full review -,that such a change should receive. Thus, even a de minimis increase in a pollutant can be subject to PSD review if that pollutant would be significant when added to previous increases (this 

# is further explained below). In order for EPA to treat such a change as a new project, and not as part of the already

4-2***DRAI"X***JUne 11, 1991***

p ermitted project, the applicant would be required to make a demonstration that the two projects are physically independent and were considered to be separate projects for planning

purposes. If the reviewing agency concurs that the new project is 

### a separate project, the change can then be treated as such. These criteria are identical to those used for judging separation of projects already constructed (see. below). The only difference is that EPA initially presumes that a change at the site of a nonoperating source is not a new project. 4.1.2 PSD Sources Already in Operation Applications for changes to sources which have already been issued PSD permits and been placed in operation have generally been treated the same as applications to change any existing major stationary source. That is, if the change is significant it constitutes a major modification, as defined at 40 CFR Part 52.21, and a complete PSD review is re quired. If the change is not significant, it does not constitute a major modification and no PSD review applies. Under this guidance, changes will instead be processed in the manner described in the next section. The only exception to the approach described in section 4.2 arises from the need to avoid circumvention [see Chapter 5] of the regulations: if the proposed change should reasonably have been part of the initial project rather than 

### a separate project, it should be evaluated as part 

### of a new total source impact rather than as a separate action. At times, such proposed changes take the form of "separate" sources or even projects involving more than one source. However, if the reviewing agency judges that such sources or projects are part of the same project covered in a previous PSD application, the changes should be treated identically to changes for sources which have not yet begun operation. This must be determined by the reviewing agency on a case-by-case basis, taking into account whether the proposal

4-3***D1pAFT***Juna 11, 1991***

represents changes at the source which are physically independent of the original project, and whether the applicant can provide documentation to show that planning of the second project occurred after the planning for the first project. Thus, if a PSD-permitted boiler has been constructed, and the owner applies for a 

### de minimis increase in SO2 emissions from the boiler which, in the judgment of the review agency, should have been a part of the original permit application, the requested change cannot be treated as a new application (and therefore be exempt from review because it is 

### de minimis). It will instead be subject to each PSD review element within the permit revision process as described is section 4.2. Conversely, if the applicant applies for a new processing unit to be used in a completely separate production area of a chemical plant, this application can be treated as a new project and exempted from review, if 

### de minimis. 4.2 LEVELS OF REVIEW 4.2.1 Amendment Changes to a permit or application are classified as amendments if they are administrative and result in 

### no increase in either the emissions or the air quality impact of a PSD

source. In addition, neither the nature nor the size of the source or emissions unit can be altered to the extent that the change would be considered fundamental. Amendments may be processed quickly without any major reevaluation of the decisions originally made in permitting the source. Examples of the types of changes which would often be treated as an amendment include

company name 

### or operator changes, requirements for more frequent monitoring or reporting by the permittee, correction of typographical errors (except errors involving emission rates or levels), emission decreases (although to be used in netting or trading, such decreases must be carefully documented and made Federally-enforceable), changes in the type or location of nonemitting equipment and buildings (So 

### long as there is no

4-4***DPAFT***Juna 11, 1991***

resulting increase in emissions), and minor wording clarifications. It should be noted that a fundamental change (see below) may also result in no increase in emissions or ambient impact, but cannot be treated as an amendment. The lack of emissions and impact increases for an amendment results in little or no review. Proposed amendments (which are nearly always administrative changes) to applications and permits do not require any reanalysis of the basic review originally submitted and need not be subject to public participation requirements as a general rule. However, the EPA emphasizes that there may be instances where changes which are normally administrative may be sufficiently important that the reviewing authority determines that review or public participation is necessary, e.g., a change of ownership of a proposed source to a company which has been involved in highly controversial projects or has received public attention as a result of the manner in which other air pollution sources owned by this company were operated. 4.2.2 Revision The term "revision" encompasses the review level required for the large majority of minor and significant changes at all pre-operational sources and at existing (operating) major stationary sources which do not qualify as "major modifications," as defined 

### by the PSD regulations, or 

## as fundamental changes. In the case of operating sources, revisions include most changes involving construction or changes in the method of operation of a source, including control equipment, that do not produce a net significant emissions increase. A net significant emissions increase resulting from a physical change or change in the method of operation at an operating source. usually constitutes a major modification as defined in the rules and is processed 

## as such. It should be noted that there is a distinction between modifications (as defined in the PSD rules) which are not subject

4-5***DRAF'T***June 11, 1991***

to NSR, and changes (whether requested or necessary) to a permit or permit application. A change which does not result in a significant net increase in emissions is 

## not considered a "major modification" and is not subject to PSD; however, the change may require (or the owner may request) •a revision of the source permit (or application).. For instance, the extension of commence construction dates is a change that should be handled as a revision. In such cases, the reviewing agency may consider some level of reanalysis and review necessary before revising the permit or accepting an application revision because there could have been significant deterioration in air quality since the original commence construction dates were established. In addition, it is usually appropriate to seek public comment on the proposed extension, since other potential new sources may be affected. Another example is, a source may want to change a solvent used in one of its processes, with no increase in emissions, but the permit specifies the solvent to be used. Before revising the permit to allow use of the new solvent, the reviewing agency may decide to repeat the impact analysis and/or the public comment if the new solvent is more odorous or toxic than the current solvent, or revise some other component of the existing analysis. The impact analysis should also be repeated if the change in solvents results in new requirements being applied, such as VOC regulations or MACT standards.Despite the possibility of a revised analysis, nonsignificant emission increases do not constitute the type and degree of review to which major modifications are subject. In many cases, it is anticipated that little or no revised analysis will be required of nonsignificant emissions increases. On the other hand, changes to permit (or application) parameters which the review agency considered important enough to include on the permit (or rely upon in the application) should certainly be subject to review before those parameters are revised.

4-6***DRATT***Juno 11, 1991***

The term "revision also encomp asses the level of review of most candidate application and p ermit changes proposed at nonoperational sources with respect to construction approved in their PSD permit. The 

### only excep tions are administrative changes, or changes so great that they re quire a totally new PSD review (fundamental changes). Once a change is classified as requiring the revision level of review, it is screened to determine which elements of PSD review now apply and to what extent. A revision will first require a screening analysis to determine whether existing analyses addressing the PSD requirements are still accurate or whether there is a need for revised analyses. Major components of the new source review analysis include BACT, ambient impact analysis, monitoring requirements, additional impacts analysis, Class I area protection, and public participation. A full description and explanation of these review components is contained in the August 7, 1980 Federal Register (45 FR 52676) 

### which is located in Appendix C. Depending upon what change is proposed, this screening may be very simple, as in the case of a very small increase in the size of an emissions unit, or very. involved, as in the case of the addition or replacement of a new unit at a pre-operational source. The proposed change must be examined not ' only to see if any existing analyses should be revised, but also to see if any new analyses should be performed. The criterion for requiring additional review elements is whether the original new source or major modification application underwent all of the review which would have applied had the application been submitted in its revised form originally. In addition, any new requirements added to the PSD regulations since the time that the original permit was issued also could apply, unless construction had commenced so as to qualify for an exemption (as discussed below). 

### If there is no circumvention of the permit requirements, the revision review

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would focus on only that portion of the source immediately involved in the proposed change, rather than all of those units previously reviewed. An example is a proposed change prior to permit issuance to add a unit emitting 15 tons per year of SO2 to an application for a source which originally provided for 800 tons per year of particulate matter and 35 tons per year of SO 2

. This would constitute a minor change. Since the change is combined with the original application, both the new unit and the already permitted units must undergo each PSD review element for SO 2

. This is because the original permitted level of SO2 was 

### de minimis, thereby exempting SO2 from BACT review, but the total new level of SO2 is significant (35 tpy and 15 tpy together exceed the 40 tpy threshold). However, the original application date is used in allocating increment for the original 35 tpy SO2 emissions level unless circumvention of the SO2 review had been intended. As another example, suppose a permit for a new PSD source allows 60 tpy of S02 emissions and the source was not required to gather preconstruction monitoring data because it created 

### a de

minimis ambient impact. The source owner wishes to lower the
stack which emits SO 2 , making total.S0 2 impact significant. The source owner would therefore be required to conduct a new modeling analysis and obtain representative preconstruction monitoring data before the change could be approved. In processing a revision, whether for a minor or a significant change, the reviewing authority must follow the same public participation procedures noted in 40 CFR 52.21(q). The EPA believes that the reconsideration of the conditions and review of an existing permit undergoing revision should receive no less an opportunity for public involvement than did the original permit application. This includes public notification by newspaper advertisement in the area of the source. The notice would contain information regarding the agency's preliminary

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determination, the expected ambient imp act of the p roposed change, the 30-day o pp ortunity for written comment, and an opportunity for a public hearing. A proposed change qualifyin g as a revision, rather than as a new permit, receives certain benefits. As mentioned previously, a revision can be exemp ted from any new ?SD re quirements that were added between the time of the origina permit issuance and the submission of the p roposed change if the source had commenced construction prior to the adoption of the new PSD requirement and had met its original PSD permit conditions. "Commence construction" is defined in terms of the owner cr operator having all the necessary preconstruction approvals or permits and either having (1) begun, or caused to begin, a continuous pro g ram of actual on-site construction of the source, to be completed within a reasonable time, cr (2) entered into binding agreements or contractual obligations, which cannot be canceled or modified without substantial loss to the owner or operator, to undertake a program of actual construction of the source to be completed within a reasonable time. The purpose of subjecting revisions to new requirements for sources not having commenced construction is to remove the potential benefit a source,migh_t obtain by submitting a questionable a pplication to reserve increment or avoid new PSD provisions. Another major advantage a scurce gains by qualifying for a revision, rather than having to obtain a new permit, is that the source retains the increment rights afforded by the ori g inal application or permit. Neither new perm: is nor fundamental changes to an original p roposal (which by definition change the very character or nature of a source) preserve the original increment allocation because that allocation was for a specific type and size of source at a sec_fic location. An allocation is not automatically conferred to, for examp le, a cement plant which is proposed in lieu of a p ermitted power p lant.

4***DRAFT***June 11, 1991*** If a revision being considered by EPA would cause additional increment to be consumed beyond that originally allocated, this guidance would allow the additional increment consumption only when increment is available after prior complete applications have been processed. If new increment consumption beyond the significance amounts identified in the 1978 preamble to the final PSD regulations (43 FR 26388) would result at any point, such increment consumption must also be authorized by the State in which the source would locate or is located. In addition, if Class I areas are impacted, the new impacts must be authorized by the Federal Land Manager (FLM). An especially significant issue arises from situations in which there is competition for the available air resource, that is, where other permit applications and changes are pending such that the ambient ceiling imposed by the National Ambient Air Quality Standards (NAAQS) or increment would prevent the granting of all of the applications. In such circumstances, EPA would take a first come, first served approach to allocating the growth rights, subject to State approval. This means that the original emissions growth rights would be preserved but that the remaining growth rights would be awarded to intervening applicants filing applications prior to the filing of the proposed change. When EPA is implementing this policy, it will recognize the rights of complete PSD applications filed with States which have the responsibility under their own PSD program for future permit applicants. Any State taking jurisdiction of EPA-issued permits may develop alternatives to first come, first served allocation of air resources to which EPA would generally defer. Of course,

no 

### such alternative system may allow an increment violation to
result. 4.2.3 Major Modification Operating units which propose changes that constitute a "major modification," within the meaning of the NSR regulations

4-10***DRAi"T**•Juno 11, 1991***

are subject to those requirements. Generally, this review is equivalent to the re quirements for a new source (see below), but the review is conducted only for the modification, not for the entire existing source. The term "major modification" is defined as "any physical change in or change in the method of operation

... that would result in a net significant emissions increase...." Physical changes are, in general, readily identifiable, but changes in the method of operation are often more subtle. The latter includes such activities as the removal of pollution control equipment (although improvement tc pollution control systems, as discussed elsewhere are usually not considered modifications since such a change results in an emissions decrease). For a source not yet operating, however, proposals which would normally be considered major modifications would generally, under this policy, be treated as an application or permit revision (see above).***pp J' ***J.jr 11, 1991***

4.2.4 New Permit Some changes are sufficiently important such that a separate new application or permit is required, rather than a revision to. the existing application or permit. These are of three types. First, a change to an application or a permitted source which affects the fundamental nature of the source triggers the need for a new permit. A general guide to whether the fundamental nature of a source is bein g changed is whether 'the proposed changes would result in either a different 2-digit SIC Code for the source or a significant increase in size. However, the reviewing authority must use good judgment and make this decision on a case-by-case basis. A new application or permit is required for fundamental changes because the proposed change 

### would be of such major importance to source operation that the basic permitting process should be repeated, with nc increment rights reserved. For example, a change from a dryer to a kiln may affect a review such that different emissions control system or product recovery operation would be found to be feasible for the kiln where they were not for the dryer under the original analysis. Since it is often inappropriate to apply SIC codes to portions of sources, this procedure cannot easily be used when the proposed action would affect only a part of an existing

source. The reviewing authority should therefore decide on a case-by-case basis whether the fundamental nature of the permitted portion of the source is being changed. The SIC codes could be used as a guide tc do this. For example, if a new boiler is planned or permitted at a kraft pulp mill, and the applicant wishes to construct a lime kiln instead of a boiler, it is clear that the fundamental nature of the unit (the boiler) is being changed, even thou gh she source (the kraft pulp mill) is

not. Therefore, the lime kiln would require a new permit as 

### a

4-12***DRAi'T***7tino 11, 1991***

major modification (assuming that the kiln would cause a significant net emissions increase). The second type of change considered is a fundamental chan ge in the size of a permitted emissions unit or source. A proposed change which would increase the capacity (or output) of a unit by 50 percent or more would be considered a fundamental change. The third type of fundamental change is a change in the location of a stationary source from the original location identified in the application or permit, and the new proposed location is too far from the original location to be considered a contiguous or adjacent property. A decision to review a change as a new permit application would generally entail the same data development as would the original permit application, although the review would focus on the proposed changes. In many instances, data from the original permit application could be used to expedite the new permit review process. Additional data would be required for the new or changed units and all units affected by them. If the 

### new or changed units affect the original BACT, air quality, or modelin g analyses, these analyses 

### would need to be revised accordingly. One area where the processing of certain significant and all fundamental changes may differ greatly from that of many significant and all minor changes concerns the awarding of new increment rights. As noted above, sources or emissions units involved in application and permit revisions (which assumes no fundamental change) retain their original increment rights during the revision process. In contrast, a change that is processed as a new permit must compete for available air resources behind any complete applications filed before the complete application for the change is filed. It is important to note that, while the permit as previously issued entitles the original project design to be built, the permit does not award equivalent increment

4-13***DAAfr***Juno 11, 1991***

rights to the source for any substantial shift in configuration, type, or size of units that it might wish to construct. If there has been significant growth in an area or if the area is heavily industrialized, air quality may have deteriorated so as to be near the ceiling imposed by the increments or NAAQS. In such a case, a new source permit may not be issuable. Consequently, either the one-year deadline for processin g a complete application will be controlling (EPA must disapprove a permit if insufficient increment is available within a one-year timetable) or, if the original permit has already been issued, the 18-month deadline for commencing construction (assuming 

### no extension) will force the source attempting to change its PSD. permit to finish its original construction plans or withdraw its proposed change and not construct at all. Figure 1 (Appendix B) outlines the process that a reviewing agency can follow in classifying an application for a change. Table 1 (Appendix B) summarizes guidance on which of the above described levels 

### of review should be applied to various types of permit changes. Table 1 lists a wide range of ways in which 

### a source might be changed and indicates the EPA's proposed conclusions on which forms of review would apply. It should be noted that both Figure 1 and Table 1 are presented for purposes of illustration; other types\of changes may occur and, in addition, special circumstances may arise which prompt the review authority to address a change differently.***DRAFT***JUne 11,.1991***

5.0 CIRCUMVENTION

Circumvention means an attempt by a source to avoid PSD permit review by misrepresenting the scope, emissions level, or nature of a p roposed change or project. A determination by a review agency that a proposed change to a source constitutes circumvention (the source may be located in either an attainment or nonattainment area), results automatically in a requirement that a new permit application be filed. The a pplicant would be unable to preserve any of the increment (if ap p licable) allocated_ to the original permit. A reviewing agency may discover attempted circumvention 

### a number of ways, including the applicant's original project design or financial data. An example of circumvention would be the p roposed addition of a 15 tpy NOx emissions unit to a permit for a source originally proposed to emit 200 tpy of particulate matter and 35 tpy of NOx (which is less than the NOx significance level of 40 tpy and which if exceeded, triggers PSD review). The reviewing agency then discovers that a 50 tpy NOx unit had been planned for that source from the beginning, but that the a pplicant had attempted to avoid NOx PSD review (including BACT) by applying in two stages. In such a case, the original permit is valid only for the source exactly as specified. If the a pplicant wants to change the source, a new permit application must be filed. None of the original increment allocation is p reserved, and the "complete application" date for the source would be the date the proposed change application was considered complete. This is intended to discourage the submission of deliberately incomplete or misleading applications.***DRAFT***J`una 11, 1991***

However, EPA would still intend,, even in cases of circumvention, that any portion of the original application and review which are still applicable be retained, and that subsequent actions concentrate on the changes tc 'the source that result in a need for additional review.***DRAFT***Jme 11, 1991***

6.0 INCREMENT, ALLOCATION AND PRESERVATION

States that have adopted their own PSD programs are not bound by the following, and are free to allocate increment according to their own policy. Currently, EPA allocates . increments on a first-come, first-served basis, using the date a complete application was submitted to determine an applicant's place in line. The allocated increment is assigned to the specific source (or emissions unit) and location described in the

p ermit and application; it cannot be used by the applicant for another source, even if the second source is planned at the same location, nor can it be used for the same type of source at a different location. For example, assume a permit has been issued for a gas turbine used to power a cement plant at Location A, with a maximum Class II 24-hour sulfur dioxide (SO2 ) impact of 25 micrograms per cubic meter (ug/m 3 ) and a nearby Class I 24-hour SO2 impact of 1 ug/m3

. The increments reserved for the cement plant are the 1 and 25 ug/m3 Class I and II impacts. If the owner decides instead to construct an asphalt plant at Location A, the increments assigned to the cement plant are not "preserved" for use by the as phalt plant. The owner must submit a new application for the asphalt plant, receive a new date of submittal of a complete application, and try again for an increment allocation. (In fact, without this guidance even minor changes that need to be made to the original cement plant application could result in loss of the allotted increment, since the increment use is assigned to the source and location exactly as specified in the original p ermit and application.) Similarly, if the cement plant owner decides that Location B (which is not contiguous with or adjacent to Location A) would be

6-1***DRAS'T***June 11, 1991***

a better p lace to construct than Location A, the increment allocated to the cement plant at Location A cannot be "transferred" to Location B. The owner must submit a new application for Location B and this new date of submittal of a complete application is used to establish the first-come, first-served increment allocation. In addition, current policy does not provide any increment allocation for proposed sources which at first are exempt from PSD review but become subject to PSD review at a later date due to a proposed change. For example, assume a listed Source A (major at 100 tpy). is estimated to emit 85 tpy of SO 2

. The owner submits an application 

## to the reviewing agency, is told that the source is exempt from PSD review, and proceeds to obtain all the necessary State and local agency permits and commences construction. At this point, the owner discovers that SO2 emissions from this source will be 115 tpy SO2 rather than 85 tpy. Assuming that there is no indication of attempted circumvention, the source under current policy must still reapply and, even though already under construction, the new application date is used to allocate increment. If another application for a large SO2 source had been submitted between the first and second Source ..A applications, Source A may be denied a permit despite the construction costs already committed to the project. Today's proposal, in contrast, provides in certain cases for the "preservation" of increment that had previously been allocated to a source if (1) the proposed change 

# is not fundamental, and (2.) there was no intent to circumvent new source review provisions. Preservation of increment refers to the retention by a review agency of the original complete application filing date in determining allocation of increment on a first-come, first-served basis. In other words, for administrative, minor, and significant changes, the original complete application submittal
date 

# is used to allocate increment. However, the preserved

6-2***DRA$'T***Jnne 11, 1991***

increment is based on no more than the original emission rates and ambient imp acts. If the revised emission rates or ambient impacts increase, only the "original" portions of the total new rates and impacts are p reserved; the increases are allocated on the basis of the date a complete application for the proposed change was submitted. If the revision results in emission rates or impacts less than the original levels, the remaining portions of the original rates or impacts are no longer preserved. This policy is not intended to provide trading or netting credits to a proposed source. The only intent is to reserve a qualifying
source's p lace in line for increment allocation. As an example, assume Source B submitted an original complete application for 275 tpy SO2 on January 20, 1991. On August 15, 1991, before a permit has been issued, Source B files a complete application for a change which would increase SO2 emissions by 55 tpy, to a total 330 tpy SO 2

. On a first-come, first-served basis, increment from Source B is allocated using the following dates:

January 20, 1991 - 275 tpy SO2 August 15, 1991 - 55 tpy SO2 Note that the source's place in line for the original increment is based on the original application date, but that subsequent increases in emissions are allocated based on the date the application for the increase was filed. Source B, under this guidance, would not be competing for 

# all 330 tpy SO2 emissions on the basis of an August 15, 1991, increment allocation date as would have been the case under current policy. Instead, Source\B competes for only the 55 tpy SO2 additional increment on the basis of the later August 15, 1991, application filing date. Sources which had previously been exempted from PSD review present a particularly difficult situation. These non-major sources consume increment in baseline areas where the minor source baseline date has been established but, unlike major

6-3***DR11TT•**JUne 11, 1991•**

sources, are not allocated increment. This guidance, however, allows increment allocation preservation for sources which, as a result of a proposed minor or significant (but not a fundamental) change, would become major as long as no circumvention was intended. Such sources would have increment allocated for the original emission rates on the basis of the original complete application date and the additional emission rates on the basis

- of the complete app lication date of the proposed change. Thus, the original source, even though exempted from PSD review, is eligible for some degree of increment preservation. This policy is intended to apply to sources which have not yet comp leted construction. The PSD rules provide that exempted ;",incr") sources not subject 

## to PSD do not become subject to PSD until their emissions exceed the threshold limits and they then propose a major modification (with one exception: a modification to a minor source which would 

## in itself qualify as a major source will result in PSD review), but this does not address p roposed changes to a source prior to completion of that source. Because increment preservation on a first come, first-served basis relies to a great extent on the date of submission of the original application, this is a particularly important date to
document. Owners and operators who feel that 

### a source is exempt from PSD review are nevertheless encouraged to promptly submit complete applications. 

### for the State permit 

### or for the record, even if they have already been informed verbally that a source is exempt, because the submission date establishes increment allocation priorities. Without a clearly documented original complete application date, this policy would be difficult to apply. In cases where the date a complete original application was filed cannot be determined, EPA will use the date construction is commenced.***DRAJT***Juao 11, 1991***

7.0 EXTENSION OF COMMENCEMENT OF CONSTRUCTION DEADLINE

One permit revision topic that deserves special attention is extension of the 18-month commencement of construction deadline. The subject regulation, 40 CFR 52.21(r) (2), states, "Approval to construct becomes invalid if construction 

### Is not commenced within 18 months after receipt of such approval, if construction is discontinued for a period of 18 months or more, or if construction is not completed within 

### a reasonable time. The Administrator may extend the 18-month period upon a satisfactory showing that an extension is justified. This provision does not apply to the time period between construction of the approved phases of a phased construction project; each phase must commence construction within 18 months of the projected and approved commencement date." It is important to note that the CAAA of 1990 and 40 CFR Part 51 (which contains the minimum requirements for a State PSD program) regulations do not expressly include the 18-month deadline. Therefore, those States that have taken over the PSD program through SIP development are not required to have the particular 18-month deadline in question. However, EPA and those States to whom the PSD program has been delegated are required to implement the 18-month deadline, since a delegate State is implementing the Federal regulations (40 CFR Part 52). Often it is difficult to determine in the preconstruction phase how all aspects of the construction plan will develop. Consequently, the EPA has received several industry,requests for various adjustments to their permits and construction schedules. These requests are usually based upon changes in the economy, weather, or consumer consumption in areas such as energy. The

7-1***DRAk'T***June 11, 1991***

EPA is responding to this need by interpretin g the regulation and proposing the policy articulated here for reviewing extension requests. Effective implementation of these p rovisions is especially important in view of the prospects for economic growth. The showing which a source must make in order to receive a permit extension has been a longstanding p roblem. Various approaches have been advocated, ranging from a stringent standard, such as impossibility in the legal sense (e.g. a source having difficulty securing patent rights would be unable to construct), to such lesser showings as economic impracticality. Each of those approaches presented varying degrees of subjectivity and certain difficulties of factual analysis. Today's proposal avoids those difficulties by providing extensions to virtually all good faith applications for extensions tc which the affected States do not object. A good faith effort must include a certification that the company currently plans to commence construction by a specific date that falls within the requested extension period. If construction does not commence within the last extension period, the applicant will have to submit 

### a new application which may require a new BACT analysis, increment consumption analysis, and analysis of the potential threat to the NAAQS if significant changes in source growth, air quality, or control technology have occurred. Another opportunity for public participation may also be

necessary. The intent of this is to discourage situations where a source may not plan to actually commence construction for a number of years but continues to tie up increment and consequently prevent growth which could occur immediately. Previous decisions often allowed a source making the threshold showing of justification of an extension to proceed without further analysis. There are persuasive reasons for reopening certain portions of the permit review, such as BACT,

7-2***DRAiP***JUne 11, 1991***

when a permit is extended. As described below, this guidance expressly provides for this further analysis. Providing extensions more readily but requiring more substantive review of those extensions is a reasonable compromise that simplifies the policy while assuring important environmental protection. The CAAA of 1990 requires review of new sources to be timely. This is especially important for key elements of review such as BACT determinations and ambient impact assessments. Consequently, there must be limitations. on the period granted in which a source can construct without an updated review. In particular, BACT is 

### an independent requirement under the CAAA of 1990 and the CAAA of 1990 contemplates that the FACT determination be current for the period in which the source's construction is actually commenced. Similarly, ambient air quality can change considerably, rendering inadequate an assessment performed at an earlier time. This guidance generally outlines a method which addresses concerns about the consistency of extension requirements across the country, while complying with the CAAA'of 1990 requirement that certain PSD determinations be timely. It is emphasized that timely requests for extensions or other modifications are the responsibility of the source. A permit is automatically invalid if construction does not commence or a request for extension is not received before its expiration date. In the case of a later request, a new permit application must be filed. This guidance requires that candidate permit extensions must meet the tests for substance and processing described below in order to be issued. 7.1 BACT REVIEW The EPA believes that in many cases the original BACT determination may still qualify as BACT if it were reviewed. This is especially the case since consideration during a BACT reevaluation is given to the costs that would be incurred in

7-3***DRAi"T***Juna 11, 1991***

changing plans and equipment purchases if a different technology were employed. These costs and time delays may be prohibitive if construction had already commenced and the source was not designed to accommodate new state-of-the-art control technology, but EPA notes that there will also be cases in which alteration of construction p lans is feasible. This could well be true of long-term, multi-unit projects for which major improvements in BACT have occurred and. the expanded construction time frame has proven conducive to such project alterations. However, EPA will require a BACT reevaluation for the first extension request to the extent of reviewing various sources of BACT information (e.g., EPA's BACT/LAER Clearinghouse, other pollution control agencies, current technical literature, EPA Regional Office) to ensure that the original BACT determination is still current. The original BACT determination can be assumed to remain appropriate, even if construction has not commenced, if no significant state-of-the-art advancement in BACT is noted from the applicant's review, or from the subsequent public comment period, and not more than three years has elapsed from the time of the original BACT determination. On a second extension request, EPA will require a full BACT analysis. 7.2 ADDITIONAL PSD REVIEW REQUIREMENTS Other aspects of PSD review, such as increment consumption and air quality impacts will remain valid since any subsequent ' major source growth in the area should have considered the impacts of the permitted source (NOTE: If the reviewing agency feels that minor source growth or other factors have adversely affected air quality and/or increment consumption, it should require a revised assessment of these aspects of the analysis). Adverse comments, if not reasonably addressed by the applicant, will typically trigger the need for a conference with EPA, the applicant, the affected State(s), and other interested parties such as FLM. The conference may be combined with 

## the public

7-4***DEtAFP***Jtrno 11, 1991***

participation requirements for extensions. The State 

## is responsible for ensuring that interim source growth in the area of the permitted source has not caused degradation of air quality to the extent that operation of the source requesting the extension would cause or contribute to increment or NAAQS exceedances; neither extensions of issued permits nor issuance of additional permits is allowed when they would cause 

## or contribute to such exceedances. If the reviewing agency inadvertently fails in this regard, it is responsible for addressing any subsequent violations. The reviewing agency is also responsible for indicating whether an extension consumes all remaining increment, thereby prohibiting issuance of permits to other possible sources in the area. A source will not be subject 

## to any other 

## asp ects of PSD review beyond those mentioned, above. 7.3 DURATION OF EXTENSION The EPA's regulations do not state the maximum length of extension which can be granted. In practice, EPA's Regional

. Offices have used 18 months as the norm and, in certain instances, have allowed longer extensions. Due to concerns of growth rights and public participation, EPA will presumptively limit extensions to durations of 18 months, or less, with a maximum of two 18-month extensions per applicant (or if shorter extensions are granted, the sum of all extensions must not exceed 36 months). This allows applicants the possibility of multiple extensions if they can be justified, but ensures that the impacted State(s) and public have control of their air resource and growth rights, and that state-of-the art BACT will be employed. 7.4 PUBLIC COMMENT The CAAA of 1990 particularly emphasizes the importance of public comment on matters affecting air resource consumption. Therefore, EPA will require the same public participation

7-5***DRAFT***Juna 11, 1991*** extension requests as noted above for permit including a minimum 30-day public comment period.

PROJECTS projects are considered either dependent In a footnote in the 1978 preamble, EPA between these types of phased projects:

"The dependence of facilities within 

### a source will be determined on an individual 

### basis. Two or more facilities will generally be considered dependent if the construction of one would necessitate the construction of the other facility(ies) at the same site in order 

### to complete a given project or provide a given type (not level of) service. A kraft pulp mill is an example of a source with dependent facilities, whereas a three-boiler power plant is a typical example of a source with major independent facilities." The purpose of this approach was. to differentiate between those phased projects which would be "grandfathered" (i.e., not subjected to new PSD rules) and those which would not. Dependent phased projects were considered fully committed as soon as construction began, so 

# all of the dependent facilities were accorded the same status; if construction on the first phase of a dependent phased project commenced by an applicable grandfather date, then all of the dependent facilities were considered

grandfathered even if construction of those phases 

### of the project had not yet commenced. Conversely, each phase of an independent phased construction project had to commence construction individually by the grandfather date to be grandfathered. This approach to phased projects was upheld in Alabama Power Co. v.
Costle. The 1978 preamble also states that EPA does not generally intend to limit the time for construction of phased projects; but does intend to re quire commencement of construction of the first phase within, 18 months of permit approval and of subsequent phases within 18 months of the date approved in the permit. Breaks in construction, as with single-phase projects, procedures for modifications, 7.5 PHASED MULTI-UNIT Phased multi-unit or independent by. EPA. defined the difference

7-6***DRAFT***Jnna 11, 1991***

cannot exceed 18 months. These requirements appear in 40 CFR 52.21(r) (2), where extensions of the time period between construction of different phases of phased construction projects are not allowed. The Utilities Air Regulatory Group (UARG) has petitioned EPA to delete the portion of the regulation limiting extensions of permitted construction intervals between phases at phased construction projects. Since the regulation could be interpreted 

## as allowing for extension of the construction commencement deadline only for the first phase of independent, multi-unit projects, and since most utility construction projects are phased independent multi-unit projects, UARG is concerned that the regulations prohibit extensions for later phases of these utility independent multi-phase projects. In response, EPA provides the following clarifications. First, it is EPA policy that both dependent and independent phased projects may obtain a single comprehensive PSD permit for all phases of the project. A single permit offers an applicant the advantages of reduced paperwork and assurance that the entire project (rather than only a portion of it) is permitted. Since comprehensive permits 

## apply to projects which are often large and complex, such permits should specify at least two items that are not needed in permits for single-phase projects. These items

are: (1) Which BACT determinations will be reassessed prior to commencement of construction, and (2) The date by which later phases (but not necessarily. the initial phase) of the project must commence construction. BACT review (and re-determinations of BACT as appropriate)

- is required by 40 CFR 52.21(j)(4) at the latest reasonable time which occurs no later than 18 months prior to commencement of construction of each independent phase of a project, so inclusion in a permit of the BACT determinations which will be reassessed

7-7***DRAtT***Juna 11, 1991***

is not a requirement conducti ng such

. a reassessment. However, the inclusion of this information in the hermit provides the owner/operator, the inspector, and the Public advance notice of

which appears in the permit, a date which can be changed by revising the permit. The procedure for changing commence construction dates which are embodied in a permit is the same procedure used for any other p ermit change, as previously
outlined here. The initial phase commence construction date is extendable using the, 40 CFR Part 52.21(r)(2) procedure unless that date is also embodied in the permit. When embodied in a permit, even the initial phase commence construction date can be changed only through a permit change. The above policy concernin g the initial phase commence construction date may appear to conflict with 40 CFR 52.21(r) (2); it does not. The intent of 40 CFR 52.21(r)(2) is to establish an automatic 18-month expiration date for permits, with provisions for extending the expiration date on a case-by-case basis. For phased projects with a sin g le comprehensive p ermit, EPA presumed that commencement dates for each phase of the p roject, except the initial phase commencement date, would be incor p orated into the permit. Therefore, initial phase commencement date changes would be handled with a 40' CFR 52.21(r) (2) extension, and subsequent phase commencement dates would be handled through permit changes. 'the intent of the The commence extended using the this does not mean those dates can be extensions. Since to the dates considered a
commencement review agency to conduct suc a reassessment. construction sates in the oermi.t cannot be mechanism embodied in 40 CFR 52.21(r) (2), but that such dates are unchangeable. In fact, changed, but not by the granting of
these dates are a p art of the permit, require a permit change, which will usually minor change. The "pro:ected and ap p roved date" referred to in 40 CFR 52.21 (r) (2). is the changes be

date***DRArT***SUna 11, 1991***

This acknowledges and preserves the validity and legality of the conditions specified in a permit. If for some reason, such as a long 

## planning lead time on a complex project, the initial phase commencement date is longer than 18 months but still within a reasonable period of time (e.g., 2 years and 6 months), the review agency may specify the initial phase commencement date in the permit, keeping in mind that the source is granted 18 months beyond this date to actually commence construction. Alternatively, the review agency may specify the permit expiration date in the permit. The expiration date simply includes the. initial .18-month grace period; it is determined by adding 18 months to the commence. 

## construction date and avoids the confusion that could result when dealing with the commence construction date alone. The specified date in the permit takes precedent over the "automatic" 18-month expiration based on the permit issuance date, but in doing so renders the permit ineligible for the 18-month extension process described in 40 CFR 52.21(r) (2); a permit change is required to change a commencement (or expiration) date that appears in a permit. There is an exception to this: if the date specified in the permit for the initial phase of a project is simply the expiration date of the permit (the commence construction date plus the 18-month grace period); then that date is assumed to be in the permit for information purposes, does not make the source ineligible for 40 CFR 52.21(x)(2) extensions, and does not need to be changed to grant extensions of the expiration date. For some projects, the commence construction dates for each phase may have been included in the application or other materials, but may not appear in the permit. In such cases, the commencement dates for each phase are those dates which the review agency used in evaluating the impact the source would have. Nearly always these will be the dates submitted by the applicant in the application, and these commencement dates are

7-9***DRAF'T***Jhna 11, 1991***

changed by following this guidance on changing applications and permits. As a part cf any such change, review agencies should not only revise the dates in the application, but also include the extended commencement or expiration dates in a revised permit. Independent phased multi-unit projects have the option of having separate permits for each phase; dependent phased projects do not have this option, because all phases of a dependent project must be completed for that project to operate as intended. Separate permits for each phase of an independent phased project are treated for processing purposes as if each permit was for a separate facility, with independent commencement dates, BACT determinations, enforcement actions, etc. Separate permits may increase paperwork, but in return provide an applicant with the option of proceeding with planning on a project one. phase at a time. The concept 

### of "separate" permits versus a single comprehensive permit is. more a matter of the manner in which the phases are treated than the physical manner in which the permit 

### is issued. A single comprehensive permit, for example, could consist of a number of permits for various emission units and phases of the project, with possibly a general permit to address conditions common to all the project facilities. Conversely,' "separate" permits for an independent phased project may physically consist of a "single" permit which nevertheless treats each phase separately. Of course, EPA would presume that single and multiple permits were what they appeared to be unless there actually existed some clear basis for treating a single permit.as a set of separate permits, and vice versa. The reason for distinguishing between dependent and independent phased projects lies in the applicability determinations when new or revised PSD rules become effective after construction commences on the initial phase, but before

7-10***DRAFT***Jnne 11, 1991***

construction commences on the last phase. All chases of dependent phased p rojects are oran.dfathered not subject new or revised PSD rules if construction on the project (usuall y the first

phase) had commenced prior tc the effective date of the rule change and no invalidity lapses in construction had occurred] In contrast, each phase cf indep endent phased construction project must individually commence construction by the prescribed grandfather :ate (s) . Any phases which had commenced construction would not be subject to the new rules. Since the concern expressed by UA_RG appears to be addressed coward multi-unit power p lants which may have been p ermitted as dependent, rather than independent, multi-phased projects, this guidance offers independent phased project ap p licants an opportunity to convert (or otherwise obtain acknowledgement from the review a gency of such change in project classification) a dependent multi-phased project permit for that project into independent multi-phased project permits with full preservation of the increment allocated by the original permit, as long as no increment or NAAQS exceedances would result. This conversion (but not any simultaneous or subsequent requests fcr other actions, such as extensions) would be carried out without additional PSD review re quirements, such as review of BACT, although such conversion does not abrogate any other authority either EPA or other review agencies have to reassess permit analyses. In particular, this conversion would not allow circumvention of the BCT review p rior to construction cf each independent phase which is required in 40 CFR 52.2(j) (4). The UARG also expressed concern regardin g the time taken by review agencies to decide whether to grant construction date extensions, citin g a case where an a pplicant felt forced to initiate constructi'en simp ly to protect the validity of the permit because no response to the request for an extension had been received. Althou gh the new p c_icy described above of***DRAFT***Juna 11, 1991***

providing extensions to virtually all good faith applications should resolve this problem, EPA shares the ccncern of UARG that such "forced construction" be prevented. Therefore, the following approach has been instituted to handle such requests: (1) A source has an obligation to provide sufficient time for an agency 

## to review requests for extension of a commencement of construction date. Therefore, such requests (including adequate documentation) should be submitted 

## to the review agency at least 6 months prior to the date on which the permit would become invalid (the scheduled commencement of construction date

- plus 18 months). (2) The EPA will make every effort to respond to such requests within 3 months of the date the request for an extension is submitted. (3) If a request 

### was submitted in accordance with paragraph (1) above, and EPA has not responded within the 3-month time period indicated in paragraph (2) above, then the permit invalidation date 

## will be considered extended automatically in such a manner that an applicant will always have at least
3 months between the date on which EPA does respond and the new permit invalidation date. The 3 months provides the applicant time to either commence construction or take other action. This policy does not apply if the applicant does not meet the obligation expressed in paragraph (1); in such cases, there is no automatic extension of the invalidation date. For example, assume a permit was issued for a large project with an anticipated commencement of construction date of February 1, 1991. The date the permit would become invalid (unless construction had commenced) is 18 months after this date, August 1 1992. On January 30, 1992, the source applies for an 18-month extension, meeting the 6-months-in-advance source obligation. If EPA agrees to the extension, then the extension is for'18 months from either the =nvalidation date (August 1,

7.-12•.M( 

### `r Y

• . Z--ne 11, :391 ♦ Y • 1992) or the date EPA responded, whichever is _ater. :f EPA disapproves any extension, the invalidation date is either August I, 1992 or 3 months frc' the dace of EPA's response, whichever is later.***DRJ ***June 11, 1991***

8.0 AMBIENT IMPACT CHANGES

A proposed change to a source can affect the ambient air quality impacts of a source's emissions without changing the level of emissions from the source. For example, a shorter stack could increase ground level ambient imp acts; so could relocation of a planned emissions unit closer to the source's restricted access boundary. Proposed changes of this type must also be taken into account, and 

## this gui-dance toes so by recommending that reviewing agencies analyze new source configurations 

### on a case-by-case basis to determine whether and how much additional modeling is necessary in order to determine if the change in the source's ambient impact is minor or significant. The source's ambient impact, as determined by modeling, should be compared to the significance levels in 40 . CFR 51.160(b) (2), and if such impact is less than or equal to the appropriate significance level the requested change to the source will be processed as a minor change according to the procedures previously set forth.
When , the predicted impact is greater than the appropriate significance level it is by definition an impact which could cause or contribute to a violation of the NAAQS, and if this is the case, the requested change' must be denied. 

## Also, if the proposed change to a source or emissions unit will result in an exceedance of the applicable PSD increment this too is grounds for denying the change.***DRAFT***JUna 11, 1991***

9.0 BEST AVAILABLE CONTROL TECHNOLOGY CHANGES

The guidelines for handling BACT changes for already

op erating sources is in most cases a less rigorous approach than the strict legal alternative of requiring an owner or operator to submit to an entirely new review regardless of the significance of the proposed change. Under this approach, only those portions of the permit review process which the change affects 

## will be

rep eated, and in all but fundamental changes to the source, the increment allocation of the source is preserved. This approach also is intended to prevent attempts to circumvent part or all of the review process without discouraging genuinely needed changes. For these reasons, it is essential that requests for changes to less stringent BACT levels be evaluated cautiously and completely before they are granted. There is some concern that this'approach could be interpreted in such a way as to weaken enforcement actions. Since such is definitely not the intent of this approach, the following additional guidance is 

## provided. First, this process for BACT changes provides no relief from the obligation an applicant has to meet all applicable permit conditions. Conditions on the existing permit remain in effect and can 'be enforced until such time as a revised permit is issued. If circumstances surrounding the request appear suspect, then the situation should be studied to determine whether an enforcement action would be justified. Second, it is EPA's intent to recognize and ensure that enforcement actions have and will retain the primary role in ensuring compliance. For that reason, the BACT change process described herein is applicable 

### only if there is no enforcement

9-i***DAAF'T***June 11, 1991***

action or consent decree directly related to this requested BACT change. In addition, if enforcement action or a consent decree directly related to a requested BACT change occurs during the

. processing of the requested BACT change under this policy, then all authority for the requested BACT change reverts to the enforcement action, and any change to BACT must be embodied in the consent decree resulting from the enforcement action. The intent of this process is to provide means other than enforcement action for sources which are--and remain-in compliance with their originally issued permits to obtain relief from an untenable permit condition. Sources may elect to cease operation until a revised permit is issued, or to reduce process rates, or incur higher. control system operating costs to ,remain in compliance during the processing of a requested BACT change, but operation at emissions levels higher than allowed * by the existing BACT requirement in anticipation of a revised BACT level constitutes noncompliance that can result in an enforcement action which terminates this administrative procedure. For sources subject to enforcement. action, permit modifications (including BACT changes) may still be possible, but are handled as a part of the consent decree. For this BACT change process to apply, all of the following additional conditions must be met: (1) the change requested must be a BACT change only, (2) the source must have been constructed exactly as the permit and application indicated, (3) the source must be an operating source, and (4) the source must have made a good faith effort to achieve the level of control specified in the permit. A flow chart in (Figure 2 

## in Appendix B) summarizes the decisions and actions involved in processing proposed revisions of BACT limits for PSD sources which have begun operation. Although it may appear that decisions using the flow diagram are

9-2***OR711Z***Jnna 11, 1991***

cut and dried, this is not really true. Common sense and good engineering judgment will be the determining factor in almost

every case. Since BACT change requests from a source seldom ask for a more stringent BACT limit, this proposed process concentrates o

re quests which would result in increased emissions of at least one pollutant. It does not matter whether the emissions limit is part of the actual permit (although it should be); if the emissions would increase over the level used in the original permit analysis (usually, this is the level given in the permit application), then that increase is of concern to the EPA. Put more concisely, the reviewing agency will determine: (1) whether a modification to the permitted BACT level is justified, and then, if justified, (2) whether such a modification is legal.***DRAF`T***JUn® 11, 1991***

APPENDIX A***DRAFT***Juao 11, 1991***

MODEL PSD PERMIT MODIFICATIONS REGULATIONS

(a) (1) (Applicable to State programs, see Appendix B to this part). Any request by the permittee for modification to an existing PSD permit or application shall be processed in accordance with all requirements set forth under this subsection. Appendix B to this part contains supplemental materials which amplify and explain the procedures set forth in this subsection. (2) Termination. PSD permits may be terminated only by rescission under § 52.21(w) or by automatic expiration under § 52.21(r). Applications for rescission shall be processed under § 52.21(w) and are not subject to this part. (3) Definitions. Whenever PSD permit modification requests are processed under this subsection, the following terms shall have the following meanings: (i) "Administrative change" means a change involving no increase either of the emissions or the ambient air quality impacts, and no fundamental change in either the source or the emission units at the source. (ii) "Minor change" means a chance which results in an emissions or ambient air quality impact increase, but such increase is less than the significance levels in 40 CFR 51.165(b) (2Y. (iii) "Significant change" means a change which involves an emissions or ambient air quality impact increase equal to or greater than the significance levels in 40 CFR 51.165(b)(2) Major modification review level is triggered for the emissions increase, unless the affected source is not yet operating. (iv) "Fundamental change" means a change that is 

### so great that regardless of the net emissions change, or the ambient air

A-2***DAAFT***Juna 11, 1991***

quality impact differences, the source is considered a new source (Or emissions unit) and a totally new p ermit is necessary. There are three types of fundamental changes: (A) Changes in the nature of the source which result in a new "Major Group" SIC code (sources which belong to the same industrial grouping have the same two-digit code as described in the 

### Standard Industrial Classification (SIC) Manual, 1972, as amended by the 1977 Supplement (U.S. Government Printing Office stock numbers 4101-0066 and 003-005-00176-0, respectively)); (B) Changes which increase the capacity of an emissions unit or source by 500 or more; (C) Changes in the location of a stationary source if the new proposed location has not been previously identified in the application 

## or permit, and it is a, sufficient distance from the original proposed location that it 

## is not considered a contiguous or adjacent property. (v) "Circumvention means an attempt by a source to avoid PSD permit review by misrepresenting the scope, emissions level;, or nature of a proposed change or project. (vi) "Grandfathered" means, with respect to a construction project, that the project is not subject to any new or revised PSD rules if construction commences prior to the effective date of the rule change and no invalidity lapses in construction have occurred. (vii) "Dependent phased project" for the purposes of this section means a project which is considered fully committed as soon as construction begins, so that all of the dependent units of the project are accorded the same status. (viii) "Independent phased project" for the purposes of this section means a project, each phase of which, must commence construction individually by the grandfather date to be considered grandfathered.

A-3***DRAFT***June 11, 1991***

The date by which construction is to commence (or else the permit becomes invalid) shall be extended only if the requirements of 1:0 CFR 124.5(g) (10) are met. (6) Minor Changes. Minor changes shall be made only after the appropriate analyses and reviews have been completed and the result of such analyses and reviews is that the change is acceptable. The reviewing agency determines what is appropriate, including whether public participation is warranted, in accordance with the guidance. 

## in Appendix B. (7) Significant Changes. Significant changes which constitute a major modificatas defined in 40 CFR 52.21 and 51.166 must be processed as such. All other significant changes shall be made only after the appropriate analyses and reviews have been completed and the result of such analyses and reviews is chat the change is acceptable. The reviewing agency determines what is appropriate, including whether public participation is warranted, in accordance with the guidance in Appendix B. (8) Fundamental Changes. Fundamental changes shall be processed as new permit applications. (9) Increment Allocation and Preservation . Preservation of increment refers to the retention by a review agency of the original complete application filing date 

## in determining allocation of increment on a first-come, first-served basis (provided there was no intent to circumvent new source review provisions and provided there is no alternate SIP increment allocation and preservation system in effect, in which case the SIP system takes precedent). For administrative, minor, and significant changes, the original complete application submittal date is used to allocate increment. In cases where the date a complete original application was filed cannot be determined, the Regional Administrator shall use the date construction is commenced. The preserved increment shall be based on no more

A-5***DRAFT***JUnw 11, 1991*** (ix) "Permit modification" means a request cr action to revise a permit application and permit (if already issued) to conform to a change in plans or alteration to the source that an applicant proposes to make. (x) "Revision" means a change to a permit or permit application. Application revisions usually refer to the addition of supplemental or revised information to the original application. Permit revisions consist of issuance of a revised (or new) permit which supersedes (or supplements) the original permit. 

### (4) Changes. Changes to a complete PSD application or to a PSD permit must be documented so that the public, enforcement personnel, and the source itself are able to determine the location , configuration, and type of emissions units (and other facilities 

### and activities) being reviewed or permitted. Proposed changes shall be classified as administrative, minor, significant or fundamental within 30 days of receipt of the proposed change by the reviewing agency. Changes shall be processed at least within the same period of time that a new permit application is required to be processed.
Re quests for changes shall be reviewed by the reviewing agency within 30 days of receipt of the request to determine to what extent additional review and analyses are required by the change, whether the request contains the information and analyses needed for the review, and whether public participation is warranted. If all the information is contained in the request, the request is considered complete. Applicants shall be notified of these determinations within 45 days of receipt of the request. 

### (5) Administrative Changes. Except for an extension 

### of the commence construction date, administrative changes do not require additional analyses by the applicant, additional review by the reviewing agency, or public participation. The reviewing agency shall, however, revise the application and permit accordingly.

A-4***DRAFT***Juno 11, 1991***

than the original emission rates and ambient impacts. If the revised emission rates or ambient impacts increase, only the "original" portions of the total new rates and impacts shall be preserved; the increases shall be allocated on the basis of the date a complete application for the proposed change was submitted. If the revision results in emission rates or impacts less than the original levels, the remaining portions of the original rates or impacts will no longer be preserved. The only intent of this subsection is to reserve a qualifying source's place in line for increment allocation. It is not intended to provide trading or netting credits to a proposed source. Sources which had previously been exempted from PSD review, unlike major sources, shall not be allocated increment. Increment allocation preservation, however, is allowed for sources which, as a result of a proposed minor 

## or significant (but not a fundamental) change, would become major as long as no circumvention was intended. Such sources would have increment allocated for the original emission rates on the basis of the original complete application date and the additional emission rates on the basis of the complete application date of the proposed change. Thus, the original source, even though exempted 

### from PSD review, is eligible for some degree of increment preservation. This increment preservation shall not apply to non-major sources which have not completed construction. (10) Extension of 18-Month Commence Construction Date(s). Extensions shall be granted to virtually all good faith applications for extensions to which the affected States do not object. A good faith effort shall include a certified statement that the applicant currently plans to commence construction by a specific date that falls within the requested extension period. If construction does not commence within the last extension period, the applicant shall submit a new applicationwhich may require a newBACT analysis, increment consumption analysis, and

A-6***DRAFT***JUne 11, 1991***

analysis 

### of the potential threat to the NAAQS if significant changes in source growth, air quality, or control technology have occurred. Candidate permit extensions shall meet the following requirements for substance and processing in order to be federally enforceable: (i) An applicant shall

. conduct a BACT reevaluation 

### for the first extension request, which at a minimum shall include a review of various sources of BACT information (e.g. EPA's BACT/LAER Clearinghouse, other pollution control agencies, EPA Regional Office) to ensure that the original BACT determination is still current. The original BACT determination can be assumed to remain appropriate, even if construction has not commenced, if no significant state-of-the-art advancement in BACT is noted from the applicant's review, or from the subsequent public comment period, and not more than three years has elapsed from the time of the original BACT determination. On a second extension request, EPA shall require a full BACT analysis. (ii) Other aspects of PSD review, such as increment consumption and air 

### quality impacts can be assumed to remain valid unless comments indicating otherwise are received from affected State(s), Federal Land Managers, or other interested parties during the public comment period, since any subsequent major source growth in the area should have considered the impacts of the permitted source. Adverse comments, if not reasonably addressed by the applicant, will typically trigger the need for a conference with EPA, the applicant, the affected State(s), and other interested parties such as Federal Land Managers. The conference may be combined with the public participation requirements for extensions. (iii) If the reviewing agency feels that minor source growth or other factors have adversely affected air quality and/or increment consumption, it may require a revised assessment 

### of these aspects of the analysis.

A-7***DRAFT***Juna 11, 1991*** (iv) The reviewing agency is responsible for ensuring that interim source growth in the area of the permitted source has not caused degradation of air quality to the extent that operation of t:.e source requesting the extension would cause or contribute to increment or NAAQS.exceedances; neither extensions of issued

p ermits nor issuance of additional p ermits is allowed when they would cause or contribute to such exceedances. :f the reviewing agency inadvertently fails in this regard, it is responsible for remedying any subsequent violations by obtaining sufficient emissions reductions in the area. The reviewing agency, is also responsible for indicating whether an extension consumes 

# all
remaining increment, thereby prohibiting issuance of permits to other possible sources in the area. A source shall not be subject to any other aspects of PSD review beyond those mentioned above. (v) Duration of Extension. Extensions shall be limited to durations of 18 months, or less, with a maximum of two 18-month extensions per applicant (or if shorter extensions are granted, the sum of all extensions shall not exceed 36 months). (vi) Public Comment. The public participation procedures required in § 124.10 shall also a pply for extension requests, including a minimum 30-day public comment period. (11) Extension of Later Units of Phased Multi-Unit Projects. The commence construction dates in any permit cannot. be extended using the mechanism embodied in 40 CFR 52.21(r)(2), because these dates are a part of the permit. The intent of 40 CFR 52.21(r)(2) is to establish an automatic 18-month expiration date for permits, with provisions for extending the expiration date on a case-by-case basis. Changes to the dates embodied in a permit require a permit change, which shall usually be considered an administrative change (albeit one which normally should include BACT review and public participation).***DRAFT***Juna 11, 1991*** (i) For phased projects with a single comprehensive. permit, the initial phase commence construction date is extendable using the 40 CFR Part 52.21(r)(2),procedure unless that date is also embodied in the permit. The specified date in the permit, with one exception, takes precedent over the "automatic" 18-month expiration based on the permit issuance date, but in doing so renders the permit ineligible for the 18-month extension process described in 40 CFR 52.21(r)(2). (A) The exception occurs if the date specified in the permit for the initial phase of a project is simply the expiration date of the permit (the commence construction date plus the 18-month grace period), if this is the case, that date is assumed to be in the permit for information purposes, does not make the source ineligible for 40 CFR 52.21(r) (2) extensions, and does not need to be changed to grant extensions of the. expiration date. (ii) For phased projects with 

### a single comprehensive permit, EPA presumes that commencement dates for each phase of the project, except the initial phase commencement date,. are incorporated into the permit. Therefore, initial phase commencement date changes should be handled with a 40 CFR 52.21(r) (2) extension, and subsequent phase commencement dates should be handled through permit changes. This acknowledges and preserve's the validity and legality of the conditions specified in a permit. (iii) If the commence construction dates for each phase do not appear in the permit, but are included in the application or other materials, the reviewing agency shall consider the commencement dates for each phase to be those dates which were used in evaluating the impact the source would have. .Nearly always these will be the dates submitted by the applicant in the application, and these commencement dates can be changed by following the procedures set forth previously in this section concerning changes to applications and permits.

A-9***DRAF"T***JUna 11, 1991*** (iv) As a part of any such change, review agencies shall not Only revise the dates in the application, but also include the extended commencement or expiration dates in a revised permit. 

### (v) Independent phased multi-unit p rojects shall have the option of having separate permits for each phase; dependent phased projects shall not have this option, because all phases of a dependent project must be completed for that project to operate as intended. Separate permits for each phase of an independent phased project shall be treated for processing purposes as if each permit was for a separate facility, with, e.g., independent commencement dates, BACT determinations, and enforcement actions. 

## (vi) Both dependent and independent phased projects may obtain a single comprehensive PSD permit for all phases of a project. Since comprehensive permits 

### apply to projects which are often large and complex, such permits shall specify at least two items that are not needed in permits for single-phase projects. These items are: (A) Which BACT determinations will be reassessed prior to commencement of construction, and (B) The date(s) by which later phases (but not necessarily the initial phase) of the project must commence construction. 

### (vii) PSD Applicability. The reason for distinguishing between dependent and independent phased projects 

### lies in the applicability determinations when new or revised PSD rules become effective after construction commences on the initial phase, but before construction commences on the last phase. All phases of dependent. phased projects are grandfathered. In contrast, each phase of an. independent phased construction project must individually ccmmence construction by. the prescribed grandfather date(s). Any phases which had commenced construction would not be subject to the new rules. Independent phased project applicants may convert (or otherwise obtain acknowledgement from the reviewing agency of such change 

### in project classification) a

A-20***DRAFT***JUao, 11, 1991***

dependent multi-phased project permit into independent multiphased project permits with full preservation of the increment allocated by the original permit, as long as no increment or NAAQS exceedances would result. This conversion (but not any simultaneous or subsequent requests for other actions, such as extensions) would be carried out without additional PSD review requirements, such as review of'BACT, although such conversion does not abrogate any other authority either the EPA or other review agencies have to reassess permit analyses. In particular, this conversion would not allow circumvention 

### of the BACT review prior to construction of each independent phase which is required in 40 CFR 52.21(j;(4). (viii) Source Obligations and Processing Schedule. Extension requests (including adequate documentation) shall be submitted to the reviewing agency at least six months prior to the date on which the permit would become invalid (the scheduled commencement of construction date plus 18 months). The reviewing agency shall make every effort to respond to such requests within three months of the date the request for 

### an extension is submitted. If a request was submitted in accordance with the paragraph above, and the reviewing agency does not respond within three months, the permit invalidation date 

## shall be considered extended automatically in'such a manner that an applicant will always have at least three months between t1 date on which the reviewing agency does respond and the new pe.it invalidation date. The three months provides the applicant time 

# to either commence construction or take other action. If the applicant
does 

## not meet the six month obligation expressed above, the invalidation date shall not be automatically extended. (12) 

## Attempts at Circumvention. If a source attempts to avoid PSD permit review by circumvention, the original permit is 

### valid only for the source exactly as specified. If the applicant
wants to chan ge the source, a new permit application must be

A-11***DAAPT***Juna 11, 1991***

filed. None of the original increment allocation is preserved, and the "complete application" date for the source would be the date the proposed change application was considered complete. This is intended to discourage the submission of deliberately incomplete or misleading applications. However, EPA would still intend, even in cases of circumvention, that any portion of the original application and review which are still applicable be retained, and that subsequent actions concentrate on the changes to the source that result in a need for additional review. (13) Ambient Impact Changes. When a change to a source or emissions unit is proposed which changes its configuration or location without a change in emissions, the following procedure shall apply: (i) Use appropriate dispersion modeling to determine the magnitude of the ambient impacts of the proposed change to the source or emissions unit, and; (A) If the predicted impact is less than or equal to the appropriate significance level in 40 CFR 51.160(b) (2), the impact change is considered minor and the proposed change to the source or emissions unit shall be processed as a minor change. (B) If the predicted impact is greater than the appropriate significance level in 40 CFR 51.160(b) (2), the impact change is by definition considered to be one which could cause or contribute to a violation of any national ambient air quality standard, and therefore the proposed change to the source or emissions unit shall be denied. (C) In no case shall the proposed change to the source or emissions unit be approved if the modeling demonstration reveals a violation of any national ambient air quality standard, or any exceedance of the applicable PSD increment. (14) Completeness Determinations. A complete permit application is one that the permitting authority has determined to contain all the necessary data needed to begin processing the

A-12***DRAFT***Junw 11, 1991***

applicaticn. This data must include information which identifies a source, its applicable air pollution control requirements, the

current comp liance status of the source, the source's intended operating regime, emissions levels, a certification of truth, accuracy, and completeness by a responsible corporate official, and a compliance plan which describes how the source plans to achieve and/or maintain all applicable NSR/PSD air quality requirements. Some of these data requirements may not apply to sources not yet operating.***Dp J$ ***Juno 11, 1991***

APPENDIX B***DRAFT***JUao 11, 1991***

GUIDE TO PROCESSING PSD PERMIT MODIFICATIONS

This Appendix is resigned to assist in the decision making process reviewing agencies must follow when processing PSD permit modification requests and when making BACT change determinations. It consists of step-by-step directions, two flow charts and a
table. The results of various combinations of changes and source status are summarized in Table 1. Figure 1 is a flow-chart for determining which result is applicable to a specific source. Figure 2 summarizes the decisions and actions involved in processing proposed revisions in BACT limits for PSD sources which have begun operation.


### Combined Discussion for Table 1 and 

### Figure 1
1. If the source is not operational and was previously exempt from PSD permit review, and the proposed change is:
A. Administrative: Revise records as needed. No further-

- action is required.
B. Minor: Review exemption to make sure it is still appropriate. If so, no further action is required. If not, initiate full PSD review process. The original increment allocation is preserved, but the changed source is not allowed to construct until permit is issued. A new PSD permit is required.
C. Significant: Review exemption to make sure it is still appropriate. If so, no further action is required. If not, initiate full PSD review process. The original increment allocation is preserved, but the changed source is not allowed to construct until permit is issued. A new PSD permit is required.

B-2***DRAFT***June 11, 1991***
D. Fundamental: Review exemption to make sure it is still appropriate. If so, no further action is required. If not, initiate full PSD review process. The original increment allocation is not preserved. New increment shall be based



### on the date the change was submitted. The changed source 

### or emissions unit is not allowed ' to construct until permit is issued. A new PSD permit is required. 2. If the source has a complete PSD permit application on file and the proposed change is:
A. Administrative: Amend application as needed, but no additional review or re p eat of review is required. The original increment allocation is preserved.
B. Minor: Revise application to reflect the change. BACT and other review decisions already made should be screened and revised as needed. 'Public participation is required. The original increment allocation is preserved. Additional increment, allocations are based on the date the proposed change was submitted. The change is subject to any new PSD rules.
C. Significant: Revise application to reflect the change. BACT and other review decisions already made should be screened and revised as needed. Public participation is required. The original increment allocation is preserved. Additional increment allocations are based on the date the proposed change was submitted. The change is subject to any new PSD rules.
D. Fundamental: The change shall require 

### a new application and the review process must begin anew. The original increment allocation is not preserved. New increment shall be based on the date the change was submitted. 3. If the source has been issued a PSD permit and the proposed change is:

B-3***DRAFT***June 11, 1991***

A. Administrative: Change permit as needed, but no additional review or repeat of review is required. The original increment allocation is preserved.

B. Minor: ,Revise permit to reflect change. Screen review decisions and repeat or add reviews 

## as needed. Repeat public participation. The original increment allocation is preserved. Additional increment allocations are based on the date the proposed change was submitted. The source or emissions unit as originally permitted can begin operation but the changed source or emissions unit cannot construct until revised permit is issued. If construction on the original source or emissions unit has not commenced, the change is subject to new PSD rules.
C. Significant: Revise permit to reflect the change. Screen review decisions and repeat or add reviews as needed. Repeat public participation. The original increment allocation is preserved. Additional , increment allocations are based on the date the proposed change was submitted. The source or emissions unit as originally permitted can begin operation but the changed source or emissions unit cannot construct until revised permit is issued. If construction on the original source or emissions unit has not commenced, the change is subject to new PSD rules.

D. Fundamental: The 'change shall require a new permit and the review 

## process must begin anew. The original increment

. allocation is not preserved. New increment shall be based on the date the change was submitted. 4. If the source has begun operation and the proposed change is:

A. Administrative: Change permit as needed. The original permit is valid until a new permit is issued. The source can make the change and operate even before a new permit is issued. The original increment allocation is preserved.

B-4***DRAFT***Juna 11, 1991***

B. Minor: Revise permit. Unless the change constitutes a "Major Modification", the review process is not screened or repeated. The original increment allocation is preserved. The changed source or emissions unit cannot construct until revised permit is issued. The changed source or emissions unit is not subject to any new PSD rules.
C. Significant: Review as "Major Modification" according to PSD rules (40 CFR 51.166). The original permit remains valid until a new p ermit allocation is preserved. is issued. The original increment Additional increment allocations are based on the date the proposed change was submitted.
D. Fundamental: Review as a new source according to PSD rules (40 CFR 51.166). The original permit remains valid until a new permit is issued. The changed source cannot be constructed until 

### a new permit is issued. The original increment allocation is not preserved. All, increment allocations are based on the date the proposed change was submitted.


### Discussion for Figure 2 This Figure summarizes the decisions and actions involved in processing proposed revisions in BACT limits for PSD sources which have begun operation. Operating source requests a change in BACT. Are all relevant factors (e.g., environmental, economic, and energy impacts) well-documented and comparable, as recommended in the Draft NSR Workshop Manual (October 1990) 3 What is the reason for the requested change; is it a technical or economic reason? Does the request appear to be justified, or is it possible the source is attempting to avoid the consequences of a noncompliance situation? Are there any alternatives to a BACT modification? If all emissions levels do not increase, then the proposed BACT change is usually acceptable. A new permit for the

B-5***DRAFT***Juna 11, 1991***

pollutant should be issued. Such requests are often part of an emissions netting strategy. If, however, one 

## or more pollutants increase while other pollutants decrease, the reviewer must discern whether the source can 

### comply with the permitted emission limit (s) . If the permitted BACT level can be met, but the source feels that continual compliance is too costly and wants a less stringent BACT, the review should check on the compliance costs. If costs are reasonable, the request should be denied. A BACT cost per unit of product much higher than other new similar sized units 

### of that source category may be unreasonable. The reviewing agency can also assess costs on 

## a dollars per ton of pollutant collected basis and compare this to the cost of collecting that pollutant from other sources and source categories. Keep in mind that BACT cannot be less stringent than any applicable new source performance standards (NSPS) or national emission standards for hazardous air pollutants (NESHAP) limitation. If the costs are unreasonable, the reviewing agency must then decide whether the increased emissions are acceptable environmentally. Before making such a decision, however, reviewing agencies should carefully document and analyze why a cost that appeared affordable during permit review now appears unreasonable. Keep in mind that start-up operating expenses are generally higher than those during normal production and, in addition, check to ensure that 

## cost figures are not being manipulated 

## in an attempt to circumvent the permitted BACT limitations. It the control cost is reasonable, model the new total emissions levels (not just the increase) to see if the impact 

### of the source at either the point of maximum impact or on a Class I area is acceptable. If the impact of the source is not acceptable (e.g., Class I 

## or Class II increment exceedance or significant nonattainment area impacts would result), deny the

B-6***DRAF'T***Jhna 11, 1991***

change, unless there is either a variance to, cr combined Federal Land Manager/EPA approval of, the exceedance. There may be other new operating sources, new increment-consuming minor sources, and new applicants ahead of the source requesting the BACT change. All of these sources have prior claims to available increments, and must be taken into account in determining whether the BACT change would cause or contribute to increment exceedances. The source would retain the increment allocated to it by the original permit, as long as the units which were permitted continue to be operated. For this portion of the review, the reviewing agency would assess the impact of the emissions increase only, rather than total emissions, on the remaining increment. If no, increment violations are likely, the reviewing agency must decide how much of the permit review process to repeat. The general rule should be: the greater the increase in emissions, the more thorough the review process. However, the minimum legal review requirements must always be met, and the reviewer should err on the 

## side of caution. The following questions should be asked: First, does any emissions increase make a nonsignificant pollutant. significant? If so, the review process is essentially a "new" permit review, and the source can expect to go through the entire process, including public comment. It is also possible for monitoring requirements to be triggered, which could result in the source having 

## to conduct ambient air monitoring. Second, are any of the emissions increases by themselves significant? If so, a thorough review, including public participation, is called for, but at least there are unlikely to be any new PSD requirements triggered, since operating sources under these guidelines are not subject to PSD rule changes which take effect after operation begins. 

## Finally, if no new ambient air or emissions significance levels are triggered and the

B-7***DRAFT***JUna 11, 1991***

increase itself is not significant, the review may not include public participation and can be less detailed. When the review is complete, the reviewing agency can decide if the change is acceptable. A modified permit must be issued if the change is acceptable. If the source cannot meet the permitted BACT limit, the reviewer must take the following steps. First, insure that the applicant has made every attempt to meet the applicable emission limits. Such an evaluation would include, but is not limited to: determining whether the bags in a, fabric filter are the appropriate material, determining what the pressure drops and liquid flow rates are in a scrubber, etc. Insure that everything has been attempted. Secondly, the reviewer must determine whether similar control systems are used to meet BACT in similar

sources. An indicator is whether the control system selected was equivalent to systems which are known to be capable of meeting the required BACT level. A cyclone is not as good as a bag house, and an undersized bag house is 

### not as good as one sized properly. Finally, the reviewer must determine whether the source insisted 

### on the installed control system against the reviewing agency's advice. Did the source ignore the reviewing agency's advice and the experience of similar sources in 

### an. attempt to save money? Did they under-design o.r purchase substandard equipment? The goal here is to see whether there was a reasonable effort on the part of the source to meet BACT or an attempt to circumvent the regulations.***DRAFT* Juno 11, 1991***

TABLE I. Source, Application, and Permit Changes

Classification of Proposed Change Level of Action I. Source Is Not Operational and Previously

Exempted from PSD Permit Review 2. Source Submitted a Complete

. _PSI) Permit Application 3. PSI) Permit Issued to the Source 4. Source Is Operational

A. Administrative Amendments IA. Revise records as needed. No further action required. 2A. Amend application, 3A. Amend permit. 4A. Amend Permit. No emissions or ambient impact increase. Amend application as needed, but no additional review or repeat of already conducted review is required. Original increment is preserved. - Change permit as needed, but no review is required or need be repeated. Original increment is preserved. Change permit as needed. Original permit is valid until new permit is issued. Source can make change and operate even before new permit is issued. Original increment is preserved.

B. Minor Revisions or New Permits 1B. Review Exemption. 213. Revise,Application. 313. Revise permit. 4B. Revise Permit. Emissions or ambient impact increase, but less than the significance level. (NOTE: The significance levels for emissions increases are found in 40 CFR 51.166(b)(23?; for ambient impact increases in 40 CFR 51.160(b)(2).) Check to see if source or emissions unit is still exempt. If so, no further action is required. If not, initiate full permit review process. The original "increment" is preserved, but changed source or emissions unit is not allowed to construct until permit is issued. Change to source or emissions unit is processed as a new permit.* Revise permit to reflect change. Screen review decisions and repeat or add reviews as needed. Repeat public participation. Original increment is preserved. Additional increment allocations are based on the, date the proposed change was submitted. Source or emissions unit as originally permitted can begin operation but changed source or emissions unit cannot construct until revised permit is. issued. If construction on original source or emissions unit has not commenced, change is subject to new PSI) rules.' Change must be combined with original application. BACT and other review decisions already made should be screened and revised as needed. Public participation is required. Original increment allocation is preserved. Additional increment allocations are based on the date the proposed change was submitted. Change is subject to any new PSD rules.' Unless change (or combination of changes) constitutes a "Major Modification " , review process is not screened or repeated. Change is not subject to any new PSD rules. Changed source or emissions unit cannot construct until revised permit is issued. Original increment is preserved.

-C. Significant Revision or Major Modification of New Permit IC. Review Exemption. 2C. Revise Application. 3C. Revise permit. 4C. Major Modification. Emissions or ambient impact increase is significant. For operating tourers, this class of change constitutes a majormodificationProcess according to PSD roles. Original permit remains valid until new permit is issued. Original increment is preserved. Additional increment allocations are based on she date the modification application was submitted.' Same as 2A. Same as 2B. Same as 2C.

D. Fundamental New Permit ID. Review Exemption. 2D. New Application. 3D. New permit. 4D. New source. Change constitutes a new source or emissions unit due to magnitude of emissions or ambient impact increase, or to basic physical or operational alternations regardless of net emission changes Process according to PSI) rules. Original increment allocation is not preserved, but original permit remains valid until change is made- Changed source or emission unit cannot be constructed until new permit is issued. All increment allocations are based on the date the change was submitted. Change will require a new permit and the review process must begin anew. Original increment allocation is not preserved. New increment allocations will be based on the date the change was submitted. fleck to see if source or emission unit is still exempt. If so, no further action is required. If not, initiate full permit review process. The original "increment" is not preserved. Changed source or emissions unit is not allowed to construct until permit is issued and is processed as a new permit New increment will be based on date the change was submitted. Change will require a new application. Review process begins all over again. Original increment allocation is not preserved. New increment allocations will be based on date the change was submitted.

'Note: Circumvention voids any and all original incmuoent allocations for the entire source. A fundamental change in the nature or the size of a source or an emissions unit will void the original increment allocation for that source or emissions unit.***DRAFT***June 11, 1991*** 

### Figure 1. Decision Process for Proposed Source, Application and Permit Changes

Revise records as needed. No further action required. Entire source, as changed, requires a new permit. Original increment is not preserved. Change application or permit as required. No additional review needed. Continue processing as before.

Process the source, as changed, as a major source. Original increment 'consumption" allocation based on date of original application. Additional increment allocation based on date changed application submitted. Process according to PSD regulations for sources which become major. Original increment 'consumption' allocation based on date of original application. Additional increment allocation based on date changed application submitted. Change is significant. Process as a major modificalion in PSD regulations.

Process as a minor change (revision). Original increment is preserved. Change is ppj subject to any new PSD regulations. Process as a minor change (revision). Original increment is preserved. Change is subject to any new PSD regulations.

Process as a permit revision. Original increment is preserved. Change is subject to new PSD regulations.



### B-10

### Figure 2. BACT Change Determinations for Operating Sources ***DRAFT* **June 11, 1991***

Yes
at impact \ Yes _- at new emission

level acceptable?^

Work with source; try changes in operating conditions, feed rates, etc., to see it limits can be met. Administrative change: issue new permit for that pollutant

Reanalyze each pollutant which increased emissions. Evaluate new total emissions. Repeat public participation it change is significant.

/ Source \ insisted on control system against Agency advice?



### B-11***DRATT***Juna 11, 1991***

APPENDIX C***DRAFT***Juna 11, 1991***

Appendix C will 

### be a copy of the August 1980, 

### Federal Register notice concerning PSD regulations.